Top Art Galleries: New York, San Francisco, 360 Tower
March 20, 2010 20:21 Filed in: News
This week, Details magazine published its list of the
ten coolest art galleries in
America. As would be expected, the list was
dominated by galleries in New York (4) and
California (3). Less expected was the inclusion of
Austin's own Lora Reynolds Gallery which is
located in the base of the 360 tower. The remaining two
galleries were located in Chicago and Minneapolis.
Details claims that the 10 galleries on the list represent "the top places in the country to see contemporary art." In their profile of the Lora Reynolds' Gallery, the author writes that "after seven years toiling in the London and New York art worlds, Reynolds forged a niche in the competitive Austin scene by luring a roster of international talents like British artist Ewan Gibbs to Texas. As she told the Austin American Statesman when the gallery opened in 2005: "Why not bring art here that otherwise wouldn't be shown?" And what she shows doesn't just make you look—it makes you look twice."
Lora Reynolds established the gallery in March 2005 after working with galleries in London and New York. The gallery's mission is to bring national and international contemporary artists in all media to Austin. The gallery organizes 6 – 8 shows annually of emerging, mid-career, and established artists.
While Austin has a strong cultural scene for a mid-size city, it is not known for contemporary art. In addition to the well-respected Arthouse, it is great to see national recognition for Lora Reynolds Gallery. See the full article here.
Lora Reynolds Gallery
Details claims that the 10 galleries on the list represent "the top places in the country to see contemporary art." In their profile of the Lora Reynolds' Gallery, the author writes that "after seven years toiling in the London and New York art worlds, Reynolds forged a niche in the competitive Austin scene by luring a roster of international talents like British artist Ewan Gibbs to Texas. As she told the Austin American Statesman when the gallery opened in 2005: "Why not bring art here that otherwise wouldn't be shown?" And what she shows doesn't just make you look—it makes you look twice."
Lora Reynolds established the gallery in March 2005 after working with galleries in London and New York. The gallery's mission is to bring national and international contemporary artists in all media to Austin. The gallery organizes 6 – 8 shows annually of emerging, mid-career, and established artists.
While Austin has a strong cultural scene for a mid-size city, it is not known for contemporary art. In addition to the well-respected Arthouse, it is great to see national recognition for Lora Reynolds Gallery. See the full article here.
Lora Reynolds Gallery
Forbes: Austin Economy Good
March 18, 2010 22:57 Filed in: News
According to Forbes.com, the Austin-Round Rock area
tied for first on a list of large metropolitan areas
where the recession is easing.
The report listed Austin and Washington D.C. as the two top cities in terms of economic recovery. The report considered a number of factors including local economic output, job growth and real estate industry trends. While the national unemployment rate hovers at 9.7%, the comparable rate in Austin is 7.6% (up from 7% a month ago). Washington D.C. has a 6.2% unemployment rate.
According to Forbes, one thing that Austin and Washington D.C. have in common is a high rate of government job generation. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research. Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.
For anyone with a stake in downtown Austin real estate, future downtown home values will be driven by supply, access to lending, migration, and economic growth with job growth being a key factor. Supply for the next few years is highly predictable --- it's growing on the high end and flat in the low and middle price brackets. Access to mortgages remains constrained for conforming loans and highly constrained for jumbo loans. Migration is expected to remain strong. That leaves economic growth remains the biggest unknown.
While the economy is improving, cuts at large local employers or a dip in technology spending could dramatically change the local housing outlook. But so far, as Forbes notes, Austin is doing better than just about every other city in the country.
The report listed Austin and Washington D.C. as the two top cities in terms of economic recovery. The report considered a number of factors including local economic output, job growth and real estate industry trends. While the national unemployment rate hovers at 9.7%, the comparable rate in Austin is 7.6% (up from 7% a month ago). Washington D.C. has a 6.2% unemployment rate.
According to Forbes, one thing that Austin and Washington D.C. have in common is a high rate of government job generation. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research. Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.
For anyone with a stake in downtown Austin real estate, future downtown home values will be driven by supply, access to lending, migration, and economic growth with job growth being a key factor. Supply for the next few years is highly predictable --- it's growing on the high end and flat in the low and middle price brackets. Access to mortgages remains constrained for conforming loans and highly constrained for jumbo loans. Migration is expected to remain strong. That leaves economic growth remains the biggest unknown.
While the economy is improving, cuts at large local employers or a dip in technology spending could dramatically change the local housing outlook. But so far, as Forbes notes, Austin is doing better than just about every other city in the country.
Exclusive: 2009 Condo MLS Sales Review
March 08, 2010 14:16 Filed in: Market
Analysis
With the help of urbanspace Realtors, we have
put together a comprehensive analysis of recorded
downtown Austin condo transactions in 2009. The
analysis looks at MLS data capturing 2009 condo
sales in area DT during the year 2009. Like all
listing data, it excludes private transactions
that were not listed on the MLS. This is a big
exception considering that hundreds of units have
been sold through non-mls sales.
The data does, however, provide a very clear view of the downtown resale market. It shows the price per square foot that buyers are willing to pay for real units, provides information on building-by-building sales prices, and shows how long it takes for units to actually sell. Here is the annual summary of 2009:
Market Summary - MLS recorded 112 downtown Austin condo transactions during 2009 (down 14% over 2008) with an average sales price of $329,374 (down 5%) which represents an average price per square foot of $298 (down 3%). Units sold for 95% of listing price in an average of 88 (3 days faster than 2008). For the second year in a row, the project with the most sales on MLS was Milago with 24 transactions (v 25 last year). Here are the details for 2009 with the comparison to 2008 in parenthesis:
- DT Condo Transactions: 112 (130 in 2008)
- Avg. Sales Price: $329,374 ($345,856)
- Avg. Listing Price: $353,311 ($362,750)
- Sold Price as % of Listing Price: 93% (95%)
- Avg. Sold $/SF: $298 ($308)
- Avg. Listing $/SF: $319 ($322)
- Avg. Days on Market: 88 (91)
- Avg. Unit Size: 1,126 (1,106) Square Feet
Old v New - The MLS data clearly shows that the downtown Austin condo market is really 3 separate markets. The first market contains older units constructed prior to 1986 with an average age of 41 years. The second market is buildings constructed after 1998 when the current downtown boom started. The third market, which we have the least data on, is buildings currently under construction or recently completed. In particular, the high-end Austonian, W, and Four Seasons serve a much higher-end market than any of the current projects. Over the last year, sales of older units has plummeted as new buildings have entered the market. Sales of newer units are up dramatically. Prices for all units are down. Here are the details:
- Average Year Built, All Condo Sales: 1991 (1983 was the average in 2008)
- Units Built Before 1986: 40 (73)
- Units Built 1987 - 1998: 0 (0)
- Units Built After 1998: 82 (57)
- Pre 1986 Avg Sales Price & $/SF: $219,083 ($277,737) & $237 ($278)
- After 1998 Avg Sales Price & $/SF: $390,646 ($430,416) & $324 ($363)
High & Low: In a market and year where affordability is an important issue, it is amazing to see that there were 24 transactions under $200K which is a large increase from 18 units in 2008. It shows that it is possible to find affordable units downtown.
- Least Expensive Sale: $110,000 in Greenwood Towers ($107,000 in Greenwood Towers in 2008)
- Most Expensive Sale: $1,368,000 in the Nokonah ($1,100,100 in the Nokonah)
- Lowest $/SF: $162 for a unit in Greenwood Towers ($168 for a unit in Towers on Town Lake)
- Highest $/SF: $452 for a unit in the Nokonah ($571 for a unit in Five Fifty Five Condos)
- # Units Under $200K: 24 (18)
- # Units Over $750K: 5 (6)
Transactions by Month: Sales results were less cyclical than usual with strength in the second half of the year. Compared with 2008, the beginning of 2009 saw a dramatic reduction in the number of units and the back half of the year saw a strong increase over 2008. While there was strength in the back half of the year, it doesn't seem to have translated into higher prices. At Milago for example, prices were 3% lower on average in the second half than the first half.
Month - # Units
January - 4 (5)
February - 6 (6)
March - 4 (14)
April - 4 (22)
May - 11 (13)
June - 8 (13)
July - 12 (10)
August - 14 (13)
September - 15 (13)
October - 13 (9)
November - 13 (8)
December - 8 (4)
Over the next year or two, as a significant quantity of transactions continue to be conducted outside of the MLS, it will be difficult to gauge exactly what is happening with downtown Austin condo sales, especially on the high end. With a greater proportion of transactions shifting from private developer sales and auctions to resale and the MLS, we need to see increased MLS activity over the next year just for the market to remain stable. While lending remains constrained and the stresses of the economy remain strong, a dramatic near-term downtown condo upswing is unlikely. For sellers in particular, the next few months will continue to be very difficult.
With the addition of December data (it was a strong month), we've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index through the end of 2009.
The data does, however, provide a very clear view of the downtown resale market. It shows the price per square foot that buyers are willing to pay for real units, provides information on building-by-building sales prices, and shows how long it takes for units to actually sell. Here is the annual summary of 2009:
Market Summary - MLS recorded 112 downtown Austin condo transactions during 2009 (down 14% over 2008) with an average sales price of $329,374 (down 5%) which represents an average price per square foot of $298 (down 3%). Units sold for 95% of listing price in an average of 88 (3 days faster than 2008). For the second year in a row, the project with the most sales on MLS was Milago with 24 transactions (v 25 last year). Here are the details for 2009 with the comparison to 2008 in parenthesis:
- DT Condo Transactions: 112 (130 in 2008)
- Avg. Sales Price: $329,374 ($345,856)
- Avg. Listing Price: $353,311 ($362,750)
- Sold Price as % of Listing Price: 93% (95%)
- Avg. Sold $/SF: $298 ($308)
- Avg. Listing $/SF: $319 ($322)
- Avg. Days on Market: 88 (91)
- Avg. Unit Size: 1,126 (1,106) Square Feet
Old v New - The MLS data clearly shows that the downtown Austin condo market is really 3 separate markets. The first market contains older units constructed prior to 1986 with an average age of 41 years. The second market is buildings constructed after 1998 when the current downtown boom started. The third market, which we have the least data on, is buildings currently under construction or recently completed. In particular, the high-end Austonian, W, and Four Seasons serve a much higher-end market than any of the current projects. Over the last year, sales of older units has plummeted as new buildings have entered the market. Sales of newer units are up dramatically. Prices for all units are down. Here are the details:
- Average Year Built, All Condo Sales: 1991 (1983 was the average in 2008)
- Units Built Before 1986: 40 (73)
- Units Built 1987 - 1998: 0 (0)
- Units Built After 1998: 82 (57)
- Pre 1986 Avg Sales Price & $/SF: $219,083 ($277,737) & $237 ($278)
- After 1998 Avg Sales Price & $/SF: $390,646 ($430,416) & $324 ($363)
High & Low: In a market and year where affordability is an important issue, it is amazing to see that there were 24 transactions under $200K which is a large increase from 18 units in 2008. It shows that it is possible to find affordable units downtown.
- Least Expensive Sale: $110,000 in Greenwood Towers ($107,000 in Greenwood Towers in 2008)
- Most Expensive Sale: $1,368,000 in the Nokonah ($1,100,100 in the Nokonah)
- Lowest $/SF: $162 for a unit in Greenwood Towers ($168 for a unit in Towers on Town Lake)
- Highest $/SF: $452 for a unit in the Nokonah ($571 for a unit in Five Fifty Five Condos)
- # Units Under $200K: 24 (18)
- # Units Over $750K: 5 (6)
Transactions by Month: Sales results were less cyclical than usual with strength in the second half of the year. Compared with 2008, the beginning of 2009 saw a dramatic reduction in the number of units and the back half of the year saw a strong increase over 2008. While there was strength in the back half of the year, it doesn't seem to have translated into higher prices. At Milago for example, prices were 3% lower on average in the second half than the first half.
Month - # Units
January - 4 (5)
February - 6 (6)
March - 4 (14)
April - 4 (22)
May - 11 (13)
June - 8 (13)
July - 12 (10)
August - 14 (13)
September - 15 (13)
October - 13 (9)
November - 13 (8)
December - 8 (4)
Over the next year or two, as a significant quantity of transactions continue to be conducted outside of the MLS, it will be difficult to gauge exactly what is happening with downtown Austin condo sales, especially on the high end. With a greater proportion of transactions shifting from private developer sales and auctions to resale and the MLS, we need to see increased MLS activity over the next year just for the market to remain stable. While lending remains constrained and the stresses of the economy remain strong, a dramatic near-term downtown condo upswing is unlikely. For sellers in particular, the next few months will continue to be very difficult.
With the addition of December data (it was a strong month), we've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index through the end of 2009.
Another Downtown Building Boom?
March 05, 2010 20:56 Filed in: News
There should be no doubt: It's a tough time to be a
downtown condo developer in Austin, Texas. While
building costs have slipped from their peak, demand is
soft and it remains a buyer's market. For high-end
projects in particular, supply remains plentiful and
competition among sellers is fierce.
Yet, developers are once again thinking about the next wave of projects. Over the next year, the current non-luxury condo inventory is almost certain to be depleted. With a 2-4 year construction timeline, developers are thinking now about the next wave of demand.
Here is a summary of some of the projects currently on the drawing board:
- Aquaterra (condo): Originally envisioned as a 163 unit 20-floor condo tower at 210 Barton Springs Rd., this was one of the first projects cancelled. Now, the architects have been asked to update the project to be more competitive in the current environment as the developers look for a path to proceed. No funding has been lined up.
- 7Rio (Condo): Originally envisioned as a $50M 34-floor 160 unit condo project, 7Rio is also back on the drawing board and being actively rethought for development. Originally planned for completion in 2009, the building would be on the site of Ranch 616 which will be incorporated into the building. The project has been supported by the neighborhood Association and the developer has already successfully completed two other projects in Austin.
- 800 W 6th St (Office): Austin-based Cypress Real Estate Advisors plans a 120,000-square-foot, six-story, Class A office building on the site.
- Block 51 (Office + Condo): According to the Austin Business Journal, the stalled Ovation development, originally reported to be a 37-story condo tower on Block 51 by Atlanta-based Novare Group Inc. and Austin-based Andrews Urban LLC, is being revamped. It now involves a partnership with International Bank of Commerce and more office space than originally planned. The plan revisions are in the beginning stages, and specifics will be available in mid-2010, he said.
- Schlosser Tower (Office & Condo): Schlosser development plans to construct a new 27-story downtown condo and office tower. The developer is proposing to build a tower of up to 350 feet on the vacant lot between Whole Foods and Austin City Lofts. As proposed, the new building would include street level retail and parking on the lower floors, 16 stories of office space, and 90 condo units on the top seven floors. In addition, a companion building on the 2.7 acre site would include three levels of commercial office space with parking and street-level retail.
- 21c (Apartments): The developers are proposing -- but have not found funding for -- a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents. A second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.
While almost none of these projects have funding, the investment in new development is a strong sign that when the market stabilizes and commercial financing becomes more common, another building boom is likely. With projected population growth and one of the strongest economies in the country, Austin will likely be an attractive target for development as the markets improve.
7RIo Tower as originally Proposed
Yet, developers are once again thinking about the next wave of projects. Over the next year, the current non-luxury condo inventory is almost certain to be depleted. With a 2-4 year construction timeline, developers are thinking now about the next wave of demand.
Here is a summary of some of the projects currently on the drawing board:
- Aquaterra (condo): Originally envisioned as a 163 unit 20-floor condo tower at 210 Barton Springs Rd., this was one of the first projects cancelled. Now, the architects have been asked to update the project to be more competitive in the current environment as the developers look for a path to proceed. No funding has been lined up.
- 7Rio (Condo): Originally envisioned as a $50M 34-floor 160 unit condo project, 7Rio is also back on the drawing board and being actively rethought for development. Originally planned for completion in 2009, the building would be on the site of Ranch 616 which will be incorporated into the building. The project has been supported by the neighborhood Association and the developer has already successfully completed two other projects in Austin.
- 800 W 6th St (Office): Austin-based Cypress Real Estate Advisors plans a 120,000-square-foot, six-story, Class A office building on the site.
- Block 51 (Office + Condo): According to the Austin Business Journal, the stalled Ovation development, originally reported to be a 37-story condo tower on Block 51 by Atlanta-based Novare Group Inc. and Austin-based Andrews Urban LLC, is being revamped. It now involves a partnership with International Bank of Commerce and more office space than originally planned. The plan revisions are in the beginning stages, and specifics will be available in mid-2010, he said.
- Schlosser Tower (Office & Condo): Schlosser development plans to construct a new 27-story downtown condo and office tower. The developer is proposing to build a tower of up to 350 feet on the vacant lot between Whole Foods and Austin City Lofts. As proposed, the new building would include street level retail and parking on the lower floors, 16 stories of office space, and 90 condo units on the top seven floors. In addition, a companion building on the 2.7 acre site would include three levels of commercial office space with parking and street-level retail.
- 21c (Apartments): The developers are proposing -- but have not found funding for -- a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents. A second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.
While almost none of these projects have funding, the investment in new development is a strong sign that when the market stabilizes and commercial financing becomes more common, another building boom is likely. With projected population growth and one of the strongest economies in the country, Austin will likely be an attractive target for development as the markets improve.
7RIo Tower as originally Proposed
Sabine Auction Results!
February 28, 2010 21:22 Filed in: News
Today, more than 200 registered bidders showed up to
compete for 31 units in the much anticipated Sabine auction. In the
end, 29 of 31 units sold for an average 30.5%
discount with a final price per square foot of
$228. With strong demand, the developer added four
units into the auction: three just days before the
sale and the fourth unit during the auction.
Prices were about 19% lower on a price per square foot basis than the recent Brazos Place auction -- the Sabine's closest comparable. The additional discount is appropriate given the problems that have plagued the project. In a recent valuation analysis, Austin Towers estimated that a fair sales price would be a 30% discount and units traded hands for slightly less than that.
Here are the key metrics on the sale:
Sale Prices by Unit Type
* Includes 4% Buyer Premium
Sale Prices by Unit
* Includes 4% Buyer
Premium
Interestingly enough, the developers still own about a dozen units which they plan to sell directly to buyers and through MLS listings. In can be assumed that these units will sell for approximately the same price as the auctioned units which raises the obvious question: why didn't they sell the remaining units in the auction? While it's hard to know what they are waiting for, the developers likely wanted to avoid flooding the auction with too many units and driving prices even further down.
For the developers, the auction is likely a relief. It does go to show that these sorts of auctions do work and that there are many potential downtown Austin condo buyers on the side lines looking for a good deal. The prices of the remaining units -- and the speed with which these units sell -- wlll determine whether the auction prices were in fact a good deal.
Prices were about 19% lower on a price per square foot basis than the recent Brazos Place auction -- the Sabine's closest comparable. The additional discount is appropriate given the problems that have plagued the project. In a recent valuation analysis, Austin Towers estimated that a fair sales price would be a 30% discount and units traded hands for slightly less than that.
Here are the key metrics on the sale:
Sale Prices by Unit Type
|
Unit Type
|
Original Price
|
Sale Price*
|
$/SF
|
Discount
|
| 1/1
|
$252,631
|
$189,120
|
$264
|
25.1%
|
|
1/1 + Study
|
$289,900
|
$196,733
|
$210
|
32.1%
|
|
2/2
|
$464,083
|
$310,007
|
$214
|
33.2%
|
|
All Units
|
$341,697
|
$237,388
|
$228
|
30.5%
|
Sale Prices by Unit
|
Unit #
|
SF
|
Bed/Bath
|
Original Price
|
Starting Bid
|
Sale Price*
|
$/SF
|
|
303
|
693
|
1/1
|
$234,900
|
$85,000
|
$172,640
|
$249
|
| 305
|
1462
|
2/2
|
$409,900
|
$145,000
|
$276,640
|
$189
|
| 308
|
925
|
1/1 + Study
|
$267,900
|
$95,000
|
$193,440
|
$209
|
| 401
|
1461
|
2/2
|
$485,900
|
$165,000
|
$319,280
|
$219
|
| 404
|
728
|
1/1
|
$249,900
|
n/a
|
$194,480
|
$267
|
| 409
|
918
|
1/1 + Study
|
$259,900
|
$95,000
|
$193,440
|
$211
|
| 501
|
1461
|
2/2
|
$485,900
|
$175,000
|
$327,600
|
$224
|
| 502
|
755
|
1/1
|
$239,900
|
$95,000
|
$193,440
|
$256
|
| 504
|
728
|
1/1
|
$249,900
|
$85,000
|
$192,400
|
$264
|
| 508
|
951
|
1/1 + Study
|
$279,900
|
$95,000
|
$188,240
|
$198
|
| 510
|
682
|
1/1
|
$204,900
|
$85,000
|
$166,400
|
$244
|
| 605
|
1467
|
2/2
|
$434,900
|
$155,000
|
$287,040
|
$196
|
| 610
|
682
|
1/1
|
$229,900
|
$85,000
|
$167,440
|
$246
|
| 701
|
1461
|
2/2
|
$469,900
|
n/a
|
$350,480
|
$240
|
| 703
|
695
|
1/1
|
$240,900
|
$95,000
|
$197,600
|
$284
|
| 704
|
728
|
1/1
|
$259,900
|
$85,000
|
$195,520
|
$269
|
| 705
|
1467
|
2/2
|
$449,900
|
n/a
|
$315,120
|
$215
|
| 707
|
1426
|
2/2
|
$409,900
|
$135,000
|
$279,760
|
$196
|
| 801
|
1461
|
2/2
|
$530,000
|
$185,000
|
$357,760
|
$245
|
| 802
|
755
|
1/1
|
$273,400
|
$105,000
|
$205,920
|
$273
|
| 804
|
728
|
1/1
|
$311,900
|
n/a
|
$196,560
|
$270
|
| 805
|
1460
|
2/2
|
$469,900
|
$165,000
|
$309,920
|
$212
|
| 808
|
951
|
1/1 + Study
|
$311,900
|
$95,000
|
$198,640
|
$209
|
| 904
|
728
|
1/1
|
$263,900
|
$85,000
|
$197,600
|
$271
|
| 907
|
1426
|
2/2
|
$434,900
|
$135,000
|
$263,120
|
$185
|
| 909
|
918
|
1/1 + Study
|
$294,900
|
$95,000
|
$195,520
|
$213
|
| 910
|
682
|
1/1
|
$244,900
|
$85,000
|
$180,960
|
$265
|
| 1001
|
1419
|
2/2
|
$550,000
|
$195,000
|
$365,040
|
$257
|
| 1004
|
728
|
1/1
|
$279,900
|
$95,000
|
$197,600
|
$271
|
| 1007
|
1426
|
2/2
|
$437,900
|
$145,000
|
$268,320
|
$188
|
| 1008
|
951
|
1/1 + Study
|
$324,900
|
$105,000
|
$211,120
|
$222
|
|
AVG
|
1,043
|
|
$341,697
|
$117,222
|
$237,388
|
$228
|
Interestingly enough, the developers still own about a dozen units which they plan to sell directly to buyers and through MLS listings. In can be assumed that these units will sell for approximately the same price as the auctioned units which raises the obvious question: why didn't they sell the remaining units in the auction? While it's hard to know what they are waiting for, the developers likely wanted to avoid flooding the auction with too many units and driving prices even further down.
For the developers, the auction is likely a relief. It does go to show that these sorts of auctions do work and that there are many potential downtown Austin condo buyers on the side lines looking for a good deal. The prices of the remaining units -- and the speed with which these units sell -- wlll determine whether the auction prices were in fact a good deal.
UrbanSpace to Hold Monthly Q&A for Downtown Buyers
February 28, 2010 21:22 Filed in: News
In an effort to reach out to new downtown Austin condo buyers, urbanspace has announced a monthly downtown Q & A that will be held at the urbanspace office the first Saturday of every month. It is free to anyone interested in learning a little bit about downtown Austin and the development taking place.
The Downtown Q&A was founded by Emily Crawford and developed in conjunction with Bryan Cady. As former first-time buyers and former Downtown Austin newbies themselves, they wanted to provide an interactive forum to help new buyers understand the options in the current Downtown Austin marketplace. Likely questions: Should I lease or buy downtown? What is the Downtown Austin lifestyle all about? What are the best deals out there? Why live downtown?
You can join them March 6th from 11-noon.
Sabine Auction Pricing Analysis: Looking at MLS Sales
February 21, 2010 20:48 Filed in: News
With one week until the Sabine
auction, it is clear that many potential
buyers are considering participating in the sale.
With starting bids as low as $85,000, bargain
hunters will inevitably emerge looking for a great
deal. The big question, however, is what is the
right price for a Sabine unit.
For a few reasons, valuation of the Sabine units is particularly difficult. First, the building has had real problems with noise complaints, elevator issues, and a tenant lawsuit. The developers claim that the issues have been fixed but the history will still impact the value. A building is a brand, it is part of your identity, and the Sabine brand is damaged.
Second, not a single Sabine unit was transacted on the MLS in 2009. Not one. The most recent comparables are 5 transactions from mid-2008. These show an average price per square foot of $256 for one bedroom units (2 sales) and $352 for two bedroom units (3 sales) -- an unusually large difference between unit types. Since these prices were during the market peak and since they predate the buildings problems, they are just about useless.
Third, the Sabine is a condo conversion project and not a new development. This greatly restricts the comparable units that can be considered in a real analysis. Essentially, it leaves Brazos Place as the primary point of comparison. Since Brazos place also went to auction, it may be a good indicator of where the auction prices will land. But the Brazos Place auction was held during tougher times and the building did not have the problems that have plagued the Sabine. One other possible comparable is the Brown building, but we have seen very few recent MLS transactions.
So, while those are the problems, we had to start somewhere and here is the analysis: we used three valuation methods:
(1) We looked at condo conversion sales on MLS in Brazos Place and the Brown Building over the last 4 months. During this period, the average price was $271 / square feet for transacted units.
(2) We looked at the Brazos Place auction which resulted in an average price of $281 / SF (although not really relevant, the average discount was 29%).
(3) Peak MLS sale price by floor plan from early 2008. Useful information but in no way indicative of the value today.
See the full analysis: Read More...
For a few reasons, valuation of the Sabine units is particularly difficult. First, the building has had real problems with noise complaints, elevator issues, and a tenant lawsuit. The developers claim that the issues have been fixed but the history will still impact the value. A building is a brand, it is part of your identity, and the Sabine brand is damaged.
Second, not a single Sabine unit was transacted on the MLS in 2009. Not one. The most recent comparables are 5 transactions from mid-2008. These show an average price per square foot of $256 for one bedroom units (2 sales) and $352 for two bedroom units (3 sales) -- an unusually large difference between unit types. Since these prices were during the market peak and since they predate the buildings problems, they are just about useless.
Third, the Sabine is a condo conversion project and not a new development. This greatly restricts the comparable units that can be considered in a real analysis. Essentially, it leaves Brazos Place as the primary point of comparison. Since Brazos place also went to auction, it may be a good indicator of where the auction prices will land. But the Brazos Place auction was held during tougher times and the building did not have the problems that have plagued the Sabine. One other possible comparable is the Brown building, but we have seen very few recent MLS transactions.
So, while those are the problems, we had to start somewhere and here is the analysis: we used three valuation methods:
(1) We looked at condo conversion sales on MLS in Brazos Place and the Brown Building over the last 4 months. During this period, the average price was $271 / square feet for transacted units.
(2) We looked at the Brazos Place auction which resulted in an average price of $281 / SF (although not really relevant, the average discount was 29%).
(3) Peak MLS sale price by floor plan from early 2008. Useful information but in no way indicative of the value today.
See the full analysis: Read More...
Austin is Very Very Very Lucky
February 15, 2010 21:39 Filed in: News
2009 was a tough year for job creation in the United
States. Since job creation drives home prices, the 2009
job losses are likely to leave a lasting impact.
How lasting? Economists estimate that it may take the United Stated 125 months (10+ years) to fully recover the jobs lost during the great recession of 2009. In Texas, which had the strongest job growth of any state over the last decade, it is predicted to take 37 months or just over 3 years for the job losses to be recovered.
So, what about Austin? In 2009, Austin lost 2,600 jobs. In a normal recovery, the city would be expected to make up these losses in about two months -- that's 10 years and 3 months faster than the rest of the country. Local economist Angelos Angelou is predicting 26,300 new jobs and a healthy real estate environment through 2011 while warning that Austin’s economic development performance, especially around clean technology, is lagging.
While the future looks bright, we are not out of the woods yet. Technology does not perfectly follow the normal business cycle and Austin remains disproportionately dependent on the technology industry. In new areas like clean technology and biotech, the City is losing ground. Until we see job losses in the tech industry end, we're unlikely to see strong local job growth.
That said, the economic mood in town is definitely improving. One example of this is the local single family home market. In December, Austin home buyers returned in force, increasing sales 5 percent from the same time in 2008. The median price of the 1,373 homes sold in December rose to about $194,000, an increase of 6 percent year over year.
The bottom line is that we are very very very lucky. There is almost no other place in the U.S. that has emerged from 2009 as unscathed as Austin, Texas.
How lasting? Economists estimate that it may take the United Stated 125 months (10+ years) to fully recover the jobs lost during the great recession of 2009. In Texas, which had the strongest job growth of any state over the last decade, it is predicted to take 37 months or just over 3 years for the job losses to be recovered.
So, what about Austin? In 2009, Austin lost 2,600 jobs. In a normal recovery, the city would be expected to make up these losses in about two months -- that's 10 years and 3 months faster than the rest of the country. Local economist Angelos Angelou is predicting 26,300 new jobs and a healthy real estate environment through 2011 while warning that Austin’s economic development performance, especially around clean technology, is lagging.
While the future looks bright, we are not out of the woods yet. Technology does not perfectly follow the normal business cycle and Austin remains disproportionately dependent on the technology industry. In new areas like clean technology and biotech, the City is losing ground. Until we see job losses in the tech industry end, we're unlikely to see strong local job growth.
That said, the economic mood in town is definitely improving. One example of this is the local single family home market. In December, Austin home buyers returned in force, increasing sales 5 percent from the same time in 2008. The median price of the 1,373 homes sold in December rose to about $194,000, an increase of 6 percent year over year.
The bottom line is that we are very very very lucky. There is almost no other place in the U.S. that has emerged from 2009 as unscathed as Austin, Texas.
Sabine Auction Update
February 07, 2010 21:10 Filed in: News
As we reported last month, 27 of the 44 long-vacant
units remaining in the Sabine are finally
headed to auction on February 28th. The auction is
a last hope for the project which is currently
facing foreclosure.
According to the Austin Business Journal, "Beverly Hills-based auctioneer Kennedy Wilson will sell-off 27 of the available 44 units Feb. 28, taking bids as low as $85,000 and $195,000. The apartments were previously listed near $204,900 and $550,000. Condo buyers would receive a one-year Tower Health Club and Spa membership and up to $1,500 in closing costs paid by the seller."
Kennedy Wilson has handled many condo auctions in the last year, including the successful Brazos Place auction in Austin. The auction will be held in February 28th at 1 p.m. at the downtown Hilton. According to the auction firm, potential buyers must register by Feb. 25. The company has set up a Web site specifically for auction information here.
It's always hard to predict what will happen in an Auction like this. In the Brazos Place auction, held during tougher times, all 19 remaining units were sold in less than 90 minutes to a packed room of bidders. In that case, the units sold at a 29% discount to the original listing price. This is, however, is a useless barometer as the units were not selling well at the original prices. More useful is the average price / square foot which at $281/SF is a 9% discount to the 2008 downtown condo average of $308. Unfortunately for the original Brazos Place residents, the units sold for 24% less on a $/SF basis than the $370/SF average of the 12 Brazos Place units sold via MLS in 2008. We'll see what will happen with the Sabine, but discounts of 20 - 35% off original prices are likely.
The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation. Unit plans range from one-bedroom, 682-square-foot units to two-bedrooms with as large as 1,419 square feet.
Get the full details on the auction here.
According to the Austin Business Journal, "Beverly Hills-based auctioneer Kennedy Wilson will sell-off 27 of the available 44 units Feb. 28, taking bids as low as $85,000 and $195,000. The apartments were previously listed near $204,900 and $550,000. Condo buyers would receive a one-year Tower Health Club and Spa membership and up to $1,500 in closing costs paid by the seller."
Kennedy Wilson has handled many condo auctions in the last year, including the successful Brazos Place auction in Austin. The auction will be held in February 28th at 1 p.m. at the downtown Hilton. According to the auction firm, potential buyers must register by Feb. 25. The company has set up a Web site specifically for auction information here.
It's always hard to predict what will happen in an Auction like this. In the Brazos Place auction, held during tougher times, all 19 remaining units were sold in less than 90 minutes to a packed room of bidders. In that case, the units sold at a 29% discount to the original listing price. This is, however, is a useless barometer as the units were not selling well at the original prices. More useful is the average price / square foot which at $281/SF is a 9% discount to the 2008 downtown condo average of $308. Unfortunately for the original Brazos Place residents, the units sold for 24% less on a $/SF basis than the $370/SF average of the 12 Brazos Place units sold via MLS in 2008. We'll see what will happen with the Sabine, but discounts of 20 - 35% off original prices are likely.
The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation. Unit plans range from one-bedroom, 682-square-foot units to two-bedrooms with as large as 1,419 square feet.
Get the full details on the auction here.
Waller Creek Tunnel Project Advances
February 07, 2010 11:20 Filed in: News
On Thursday, City of Austin officials approved eminent
domain proceedings to reclaim a parking lot between 4th
and 5th street that is required to begin the Waller
Creek tunnel project.
The half-block property is essential to development of the mammoth downtown tunnel project. According to officials, it is needed for two tunnel easements, one temporary and one permanent. The approval does not initiate proceedings to claim the property, but allows city officials to do so if they can not reach agreement with property owners.
The Waller Creek Tunnel Project is a storm water bypass tunnel beginning with an inlet structure in Waterloo Park and an outlet structure at Lady Bird Lake near Waller Beach and the Four Seasons Hotel. Nearly, a mile long, the tunnel will vary between 22 and 26 feet in diameter. The project is expected to reduce the size of the 100-year floodplain of the lower Waller Creek watershed by an estimated 28 acres and allow denser development and redevelopment in a very desirable area of downtown Austin. A pump station at Waterloo Park will maintain constant water flow in the creek during the dry season, thus improving water quality and fostering a creek side atmosphere suitable for public venues or natural settings. Creek side inlets located between 4th and 5th streets and 8th and 9th streets will capture and divert additional flood waters south of 12th street.
The tunnel project is comprised of several construction projects, including utility relocation, the tunnel, the inlet, outlet, creek side inlets, and site restoration. The Tunnel project will cost approximately $127 million—an initial estimate based on 2006 dollars. Construction will take place from January 2010 until July 2014.
Waller Creek
According to the Austin Business Journal, "the lot discussed this week is owned by the Strenger Real Estate Holdings Ltd. and is used for paid parking. City technical resource and professional engineer Stan Evans said the temporary easement is needed for staging construction and the permanent section is needed to restore the creek and install draining infrastructure. He said the city and the property owners are currently in negotiations, but if the two do not reach an agreement by an undisclosed deadline, eminent domain will proceed."
The half-block property is essential to development of the mammoth downtown tunnel project. According to officials, it is needed for two tunnel easements, one temporary and one permanent. The approval does not initiate proceedings to claim the property, but allows city officials to do so if they can not reach agreement with property owners.
The Waller Creek Tunnel Project is a storm water bypass tunnel beginning with an inlet structure in Waterloo Park and an outlet structure at Lady Bird Lake near Waller Beach and the Four Seasons Hotel. Nearly, a mile long, the tunnel will vary between 22 and 26 feet in diameter. The project is expected to reduce the size of the 100-year floodplain of the lower Waller Creek watershed by an estimated 28 acres and allow denser development and redevelopment in a very desirable area of downtown Austin. A pump station at Waterloo Park will maintain constant water flow in the creek during the dry season, thus improving water quality and fostering a creek side atmosphere suitable for public venues or natural settings. Creek side inlets located between 4th and 5th streets and 8th and 9th streets will capture and divert additional flood waters south of 12th street.
The tunnel project is comprised of several construction projects, including utility relocation, the tunnel, the inlet, outlet, creek side inlets, and site restoration. The Tunnel project will cost approximately $127 million—an initial estimate based on 2006 dollars. Construction will take place from January 2010 until July 2014.
Waller Creek
According to the Austin Business Journal, "the lot discussed this week is owned by the Strenger Real Estate Holdings Ltd. and is used for paid parking. City technical resource and professional engineer Stan Evans said the temporary easement is needed for staging construction and the permanent section is needed to restore the creek and install draining infrastructure. He said the city and the property owners are currently in negotiations, but if the two do not reach an agreement by an undisclosed deadline, eminent domain will proceed."
Downtown Rail Service to Start in March
January 26, 2010 22:01 Filed in: News
After what seems like endless series of problems and
delays, Cap Metro has announced that light rail service
will begin in March. Service was originally scheduled
to commence on March 30, 2009.
MetroRail will run from downtown to Leaner with stops for Lakeline, Howard, Kramer, Crestview, Highland, MLK, Jr., and Plaza Saltillo. The full 32 mile trip is estimated to take 57 minutes with a maximum speed projected to be as fast as 60 mph. Capital MetroRail will offer service every 35 minutes during morning and afternoon rush hours with fares ranging from $2 to $3 depending on distance. There will also be discounts for monthly passes and certain categories of riders. Senior citizens and children under 6 ride for free.
The trains (shown below) are very attractive. The city's six trains will each have a capacity of 200 passengers with 108 seated and 92 standing. Believe it or not, the train will actually have wifi service on board as well as bicycle racks and work tables. For safety, the vehicles have ten cameras outside and six inside, as well as a sophisticated communications system.
MetroRail was originally approved in 2004 when voters within Capital Metro's territory endorsed MetroRail as part of a long-range mass transit plan, which also includes expanded local and express bus service, as well as a possible streetcar system (modeled after the Portland Streetcar), which would connect downtown Austin, the Texas State Capitol complex and the University of Texas-Austin with the master-planned Mueller Community redevelopment project. Technically, the system is not considered light rail, because it shares the main-line tracks used by freight trains, and because of its infrequent rush hour-focused service.
With a downtown stop in front of the convention center, the train will allow some downtown workers to commute to a limited number of transit friendly city locations. For Austin residents who don't live downtown, the new train will provide a way to bypass rush hour traffic.
With one route, 9 stops, and infrequent service, the train is unlikely to have a dramatic effect on the city when it begins service. In fact, the City is estimating ridership at 2,000 people a day. While a small portion of the population, removing 2,000 cars from downtown and the other destinations on a daily basis would be significant. The important thing to note is that this is the beginning: if it is successful, more trains, routes, and increasingly frequent service may be added in the future.
MetroRail will run from downtown to Leaner with stops for Lakeline, Howard, Kramer, Crestview, Highland, MLK, Jr., and Plaza Saltillo. The full 32 mile trip is estimated to take 57 minutes with a maximum speed projected to be as fast as 60 mph. Capital MetroRail will offer service every 35 minutes during morning and afternoon rush hours with fares ranging from $2 to $3 depending on distance. There will also be discounts for monthly passes and certain categories of riders. Senior citizens and children under 6 ride for free.
The trains (shown below) are very attractive. The city's six trains will each have a capacity of 200 passengers with 108 seated and 92 standing. Believe it or not, the train will actually have wifi service on board as well as bicycle racks and work tables. For safety, the vehicles have ten cameras outside and six inside, as well as a sophisticated communications system.
MetroRail was originally approved in 2004 when voters within Capital Metro's territory endorsed MetroRail as part of a long-range mass transit plan, which also includes expanded local and express bus service, as well as a possible streetcar system (modeled after the Portland Streetcar), which would connect downtown Austin, the Texas State Capitol complex and the University of Texas-Austin with the master-planned Mueller Community redevelopment project. Technically, the system is not considered light rail, because it shares the main-line tracks used by freight trains, and because of its infrequent rush hour-focused service.
With a downtown stop in front of the convention center, the train will allow some downtown workers to commute to a limited number of transit friendly city locations. For Austin residents who don't live downtown, the new train will provide a way to bypass rush hour traffic.
With one route, 9 stops, and infrequent service, the train is unlikely to have a dramatic effect on the city when it begins service. In fact, the City is estimating ridership at 2,000 people a day. While a small portion of the population, removing 2,000 cars from downtown and the other destinations on a daily basis would be significant. The important thing to note is that this is the beginning: if it is successful, more trains, routes, and increasingly frequent service may be added in the future.
Austonian Dismantles Crane, Throws Party
January 24, 2010 21:31 Filed in: News
Over the last few weeks, the Austonian has been slowly
dismantling its crane, signaling the beginning of
the final phase of construction. With the exterior
shell complete and the elevators now fully
functional, the Austonian invited hundreds of
guests to a private party on the the top three
floors of the tower last Friday night.
From floors 54, 55, an 56, I was able to see downtown from a new perspective. Needless to say, the first observation is that the Austonian is really, really, really tall. From the 56th floor, the Monarch looks tiny and the top of the Frost Bank Tower is far below. Even the 44-story 360 tower is much, much smaller. It is so tall that your ears will inevitably pop on the way up and down in the high speed elevators. At night, the city streets stretch out endlessly in almost every direction while the capital glows and the lights of sixth street flash their bright colors.
There will be at least one more opportunity for non-residents to get a look at the amazing view before residents begin moving in June. In May, the Austonian will be the site of the Women's Symphony League of Austin's 2010 Symphony Designer Show house which will be open to the public. It will be a great chance to see what can be done visually with a high end condo.
From floors 54, 55, an 56, I was able to see downtown from a new perspective. Needless to say, the first observation is that the Austonian is really, really, really tall. From the 56th floor, the Monarch looks tiny and the top of the Frost Bank Tower is far below. Even the 44-story 360 tower is much, much smaller. It is so tall that your ears will inevitably pop on the way up and down in the high speed elevators. At night, the city streets stretch out endlessly in almost every direction while the capital glows and the lights of sixth street flash their bright colors.
There will be at least one more opportunity for non-residents to get a look at the amazing view before residents begin moving in June. In May, the Austonian will be the site of the Women's Symphony League of Austin's 2010 Symphony Designer Show house which will be open to the public. It will be a great chance to see what can be done visually with a high end condo.
Update: New Central Library Progress
January 17, 2010 22:23 Filed in: News
The City of Austin has more residents than the cities
of Boston (although the Austin MSA is smaller than the
Boston metropolitan area), Seattle and Nashville.
Austin's central library is 110,000 square feet - 1/5
the size of Boston's main library, 1/3 of Nashville's,
and 1/5 of Seattle's. The Austin central library seats
300 people while Boston's library seats 4,400. Austin
has 75 public computers vs. 550 in Boston and 400 in
Seattle.
Right now, the City is actively working on plans for a flagship central library to be located where Shoal Creek crosses Cesar Chavez facing out over Ladybird lake. The project is slated to be designed by top notch Texas architects Lake|Flato. Additional details are scheduled to be released when the proposal goes before the City Council in February.
Lake, who leads the design of Austin's new central library for Lake|Flato, said the design team is currently reconciling wish lists with budgetary realities. Collaborating architectural firm Shepley Bulfinch is leading the programming phase; the work reflects ideas and input gathered from Austinites and library staff at a series of meetings in November.
According to the Chronicle, the design team is also considering how the library will interact with the site and surrounding urban fabric. "We are keen on making this library a gateway to Downtown, Lady Bird Lake, Shoal Creek, and the trail system," said Lake. The building will be sited right on the shore of Shoal Creek, across Cesar Chavez from the lake. "Libraries are becoming more public-spirited buildings – a city living room," he said. "For Austin, it makes perfect sense to engage the creek and the river. Wouldn't it be great if people could sit out on the library's porch?"
The City's pitch for a new central library is based on the argument that a Central Library with a rich collection of materials and a wide range of services is vital for the continued health of the Austin library system. The hope is that a new library would "foster intellectual energy and excitement among its citizens. It would become a community destination, bringing citizens of all ages to the central business district for pursuit of leisure reading, social interaction, lifetime learning experiences, and for the experience of being in a cultural showcase for the arts."
The current list of ideas envisioned for a new Central Library
include:
- A building located in the emerging civic/cultural center of downtown which would be an architecturally and aesthetically important destination for both residents and visitors
- At least 300,000-400,00 square feet of space to accommodate an in-depth and growing collection for current and future needs
- Rooms for community events and meetings, as well as a public auditorium seating up to 300 persons
- Exhibit and display space
- A separate space for children’s programs
- Additional public computers and classrooms for computer-aided instruction and distance learning for the public and library staff
- Connections for customers who bring in their own laptop computers
- Expanded seating space including designated quiet study areas, group study areas, and lounges
- Parking for 350-475 cars
- Coffee shop, gift shop, and book sales areas
- Drive-up window for quick book return and pickup of reserved materials
- Expanded collection of periodicals, journals, and newspapers
- Collections in world languages and services for non- English speakers and new immigrants
We'll continue to track the library's progress as new details emerge over then next month.
Right now, the City is actively working on plans for a flagship central library to be located where Shoal Creek crosses Cesar Chavez facing out over Ladybird lake. The project is slated to be designed by top notch Texas architects Lake|Flato. Additional details are scheduled to be released when the proposal goes before the City Council in February.
Lake, who leads the design of Austin's new central library for Lake|Flato, said the design team is currently reconciling wish lists with budgetary realities. Collaborating architectural firm Shepley Bulfinch is leading the programming phase; the work reflects ideas and input gathered from Austinites and library staff at a series of meetings in November.
According to the Chronicle, the design team is also considering how the library will interact with the site and surrounding urban fabric. "We are keen on making this library a gateway to Downtown, Lady Bird Lake, Shoal Creek, and the trail system," said Lake. The building will be sited right on the shore of Shoal Creek, across Cesar Chavez from the lake. "Libraries are becoming more public-spirited buildings – a city living room," he said. "For Austin, it makes perfect sense to engage the creek and the river. Wouldn't it be great if people could sit out on the library's porch?"
The City's pitch for a new central library is based on the argument that a Central Library with a rich collection of materials and a wide range of services is vital for the continued health of the Austin library system. The hope is that a new library would "foster intellectual energy and excitement among its citizens. It would become a community destination, bringing citizens of all ages to the central business district for pursuit of leisure reading, social interaction, lifetime learning experiences, and for the experience of being in a cultural showcase for the arts."
The current list of ideas envisioned for a new Central Library
include:
- A building located in the emerging civic/cultural center of downtown which would be an architecturally and aesthetically important destination for both residents and visitors
- At least 300,000-400,00 square feet of space to accommodate an in-depth and growing collection for current and future needs
- Rooms for community events and meetings, as well as a public auditorium seating up to 300 persons
- Exhibit and display space
- A separate space for children’s programs
- Additional public computers and classrooms for computer-aided instruction and distance learning for the public and library staff
- Connections for customers who bring in their own laptop computers
- Expanded seating space including designated quiet study areas, group study areas, and lounges
- Parking for 350-475 cars
- Coffee shop, gift shop, and book sales areas
- Drive-up window for quick book return and pickup of reserved materials
- Expanded collection of periodicals, journals, and newspapers
- Collections in world languages and services for non- English speakers and new immigrants
We'll continue to track the library's progress as new details emerge over then next month.
Sabine Auction Planned for February
January 10, 2010 22:09 Filed in: News
After a tenant lawsuit and a recent foreclosure
posting, it looks as if 27 of the 44 long-vacant
remaining units in the Sabine are finally headed to
auction on February 28th.
The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation.
The project has been plagued with problems. A year ago, 35 residents of The Sabine filed suit against the developers for list of problems that the condo owners say have been ongoing for month. The problems included elevator issues (a 12/29/08 elevator inspection exposed 19 code violations including some that were described as serious safety problems), problems with water leaks, window seals, and sound-proofing, and failure to pay property taxes on more than 40 units.
In addition, Compass bank has twice posted the property for foreclosure.
Now, the developer has settled with the tenants and turned control of the HOA over to the current Sabine owners -- an unusual move for a project with so many vacant units. In addition, the developer has committed to major renovations to remedy the issues raised in the lawsuit. With the lawsuit gone, the developers are able to pursue their long-rumored plan to auction off the remaining units. The auction date for 27 of the 44 units has been set for February 28. It is not clear what will be done with the remaining 17 units.
The Brazos Place auctions (as well as the sale of deeply-discounted Shore properties) showed in an even more difficult market that there is strong demand for highly discounted downtown Austin condo units. For potential bidders, auctions like this typically bring a 25-30% discount off the original prices. In the case of the Sabine
The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed in 2007 and the majority of units still remain vacant although they have been removed from the market due to pending litigation.
The project has been plagued with problems. A year ago, 35 residents of The Sabine filed suit against the developers for list of problems that the condo owners say have been ongoing for month. The problems included elevator issues (a 12/29/08 elevator inspection exposed 19 code violations including some that were described as serious safety problems), problems with water leaks, window seals, and sound-proofing, and failure to pay property taxes on more than 40 units.
In addition, Compass bank has twice posted the property for foreclosure.
Now, the developer has settled with the tenants and turned control of the HOA over to the current Sabine owners -- an unusual move for a project with so many vacant units. In addition, the developer has committed to major renovations to remedy the issues raised in the lawsuit. With the lawsuit gone, the developers are able to pursue their long-rumored plan to auction off the remaining units. The auction date for 27 of the 44 units has been set for February 28. It is not clear what will be done with the remaining 17 units.
The Brazos Place auctions (as well as the sale of deeply-discounted Shore properties) showed in an even more difficult market that there is strong demand for highly discounted downtown Austin condo units. For potential bidders, auctions like this typically bring a 25-30% discount off the original prices. In the case of the Sabine
21c Austin: Condos Out, Apartments Possible
January 03, 2010 20:33 Filed in: News
In December, the 21c team returned to Austin to comment
on the Waller Creek plan and to discuss their future
intentions for their prime Waller Creek site adjoining
Red River and Cesar Chavez downtown.
For those of you unfamiliar with the history, the project was originally scoped as a 44-story condo and hotel project on third and Brazos street. In a surprise move, the developers abandoned the planned third and Brazos project in favor of a new multi-building complex to be located a few blocks East on Waller Creek.
The new project, also to be named 21c, was slated to include a 16-story hotel with 243 rooms which would be followed by a 49-story condo tower. The hotel was supposed to break ground in 2009 and the condo tower was supposed to break ground by 2010. Then, the project became a victim of the financing crisis that has scuttled most of the other unbuilt Austin projects.
Fortunately, the developers keep trying to make the project work. In December, the 21c provided a basic overview of their current but unfunded plans for the site. First, the condos have been eliminated. In the current environment, it is simply not possible to fund a new high-end condo project in downtown Austin. Instead, the developers are focusing on a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit if they are able to hit the low-end of the target range. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents.
The second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.
Since the plan remains unfunded, the project is not likely to rise anytime soon. But the fact that the developers are actively working with the city and still try to line-up funding means that a 21c project may be yet to rise.
For those of you unfamiliar with the history, the project was originally scoped as a 44-story condo and hotel project on third and Brazos street. In a surprise move, the developers abandoned the planned third and Brazos project in favor of a new multi-building complex to be located a few blocks East on Waller Creek.
The new project, also to be named 21c, was slated to include a 16-story hotel with 243 rooms which would be followed by a 49-story condo tower. The hotel was supposed to break ground in 2009 and the condo tower was supposed to break ground by 2010. Then, the project became a victim of the financing crisis that has scuttled most of the other unbuilt Austin projects.
Fortunately, the developers keep trying to make the project work. In December, the 21c provided a basic overview of their current but unfunded plans for the site. First, the condos have been eliminated. In the current environment, it is simply not possible to fund a new high-end condo project in downtown Austin. Instead, the developers are focusing on a 31-story 350 unit apartment tower near the corner of Red River and Cesar Chavez. Rents would start at $1.50 per square foot which would mean $1,000 / month for a 700 square foot unit or $1,500 for a 1,000 square foot unit if they are able to hit the low-end of the target range. The goal would be to make the building 70% 1 bedroom / 1 bath units. As many as 10% of the units for be designated as affordable units with controlled rents.
The second tower -- which is more precarious in the current environment -- would be a 12-story 200 room hotel, spa, and restaurant. The developers are hoping to put parking underground and include ground retail in the project. Although no specifics have been announced, the third tower could include condos if at some point it does get built.
Since the plan remains unfunded, the project is not likely to rise anytime soon. But the fact that the developers are actively working with the city and still try to line-up funding means that a 21c project may be yet to rise.